Help with reporting child support payments on taxes - is informal support taxable?
Title: Help with reporting child support payments on taxes - is informal support taxable? 1 Last summer my niece's mother passed away unexpectedly, and my husband and I became the guardians for our 15-year-old niece. The biological father has been transferring $600 monthly through my Venmo account (my husband doesn't use payment apps). He always labels the payments as "child support" in the description field, but there's no formal court order in place - just a verbal agreement between them. Now I'm worried about tax implications since the money is coming into my account. Can I properly report this as non-taxable child support on our taxes, or will I end up having to pay taxes on nearly $7,200 that isn't actually my income? I don't want to get flagged by the IRS for unreported income, but this money is clearly meant for my niece's care. What are my options here?
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Luca Esposito
8 You shouldn't have to pay taxes on this money. Child support payments are not considered taxable income to the recipient, whether court-ordered or not. The key is that the payments are genuinely for the support of the child. Since these payments are clearly identified as child support in the Venmo descriptions, you have documentation of their purpose. Keep records of how this money is spent on your niece's behalf (housing, food, clothing, education, etc.) to further establish that these are legitimate support payments. The biological father cannot claim these payments as deductions either - child support is neither deductible by the payer nor taxable to the recipient.
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Luca Esposito
•16 Thanks for the info! Are you sure this applies even without a court order? I read somewhere that informal arrangements might not qualify as "official" child support for tax purposes. Also, does it matter that the money is coming to my account instead of my husband's since he's the actual guardian?
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Luca Esposito
•8 Yes, this still applies without a court order. The IRS looks at the substance of payments rather than just the form. As long as the payments are genuinely for supporting the child, they're considered child support for tax purposes. It doesn't matter that the money comes to your account instead of your husband's. You're both providing care for the child, and the funds are being used for the child's benefit. Just make sure you keep good records of the payments and how they're used for your niece's expenses.
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Luca Esposito
5 After dealing with a somewhat similar situation last year, I found an amazing service called taxr.ai (https://taxr.ai) that helped me figure out a complicated family support situation. They have a smart AI system that analyzed all my Venmo and banking transactions and helped me properly categorize support payments I was receiving for my cousin's kids. You upload your financial documents and the system identifies patterns to distinguish between personal income, gifts, and support payments. It flagged what counted as non-taxable child support vs what might be considered taxable income. Saved me from accidentally over-reporting my income! They even provided documentation explaining the tax treatment that I could keep with my records in case of questions later.
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Luca Esposito
•11 How does it handle informal arrangements like this though? Does it just take your word that certain payments are child support or does it need some kind of documentation?
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Luca Esposito
•17 Sounds interesting but I'm always skeptical about giving my financial info to some random website. How secure is it? And does it actually give advice that would hold up if you got audited?
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Luca Esposito
•5 It actually handles informal arrangements really well. The system looks at the payment descriptions, regularity of payments, and other patterns to help establish the nature of the transactions. It doesn't just take your word - it builds a case using the digital evidence from your accounts. In your situation, the consistent monthly amounts and "child support" descriptions would be strong indicators. For security, they use bank-level encryption and don't store your actual bank credentials. I was worried about that too, but they only access the information needed for analysis. And yes, the documentation they provide is designed specifically to support your position if questioned by the IRS. They cite relevant tax code sections and explain how your situation fits within established guidelines.
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Luca Esposito
17 I was super skeptical about taxr.ai at first (as you can see from my comment above), but after trying it last month, I'm actually impressed. I had a situation with family support payments coming through my accounts that wasn't clearly defined for tax purposes. The system flagged all the payments from my ex's brother for my daughter (he wanted to help but didn't want to deal with his brother directly) and categorized them correctly as non-taxable support. It even generated a detailed report explaining why these shouldn't be considered my income. My accountant was impressed with how thorough the documentation was and said it would definitely help if there were ever questions from the IRS.
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Luca Esposito
20 If you're having trouble getting clear answers from the IRS about your situation, try Claimyr (https://claimyr.com). I was stuck in this weird tax situation with my stepson's support payments and couldn't get through to anyone at the IRS for weeks. Claimyr got me connected to an actual IRS agent in about 15 minutes when I'd been trying for days on my own. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c The agent I spoke with confirmed that informal child support arrangements are still considered non-taxable as long as they're genuinely for the child's support. They also helped me understand what documentation I should keep just in case. Totally worth it instead of stressing about whether I was handling things correctly!
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Luca Esposito
•3 Wait how does this actually work? Do they have some special connection to the IRS or something? I've spent HOURS on hold trying to get someone on the phone.
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Luca Esposito
•12 This sounds like BS honestly. Nobody can get through to the IRS these days. If there was some magic service that could, they'd probably charge hundreds of dollars for it.
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Luca Esposito
•20 They use a technology that navigates the IRS phone system and waits on hold for you. When an agent actually picks up, you get a call connecting you directly to them. No special connection - they're just doing the waiting part for you so you don't have to sit by the phone for hours. They don't charge hundreds - it's actually pretty reasonable considering how much time it saves. I literally got through in about 15 minutes when I'd wasted entire afternoons trying on my own. The IRS agent I spoke with gave me specific guidance on my informal support situation that I couldn't find online.
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Luca Esposito
12 I've gotta admit I was totally wrong about Claimyr. After my skeptical comment, I decided to try it anyway because I was desperate for answers about a similar support payment situation with my brother's kids. It actually worked exactly as described - I got a call back in about 20 minutes with an IRS agent on the line. The agent confirmed that informal support payments like these aren't taxable income as long as they're consistently identifiable as child support and used for the child. They suggested keeping a simple spreadsheet showing payments received and major expenses for the child, along with the payment descriptions from Venmo as documentation. Saved me from potentially misreporting several thousand dollars on my taxes. Definitely not BS like I initially thought!
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Luca Esposito
22 My tax preparer told me that it's always better to have some kind of written agreement, even if it's not court-ordered. Could be as simple as an email or text exchange where both parties acknowledge that the $600 monthly payments are specifically for child support. Save those messages along with the Venmo records and you should be fine.
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Luca Esposito
•7 Would a written agreement need to be notarized or anything to be valid? Or literally just text messages confirming the arrangement?
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Luca Esposito
•22 Notarization isn't necessary for tax purposes. Simple text messages or emails that clearly establish the nature of the payments are sufficient documentation. The IRS is mainly concerned with understanding the true purpose of the funds, not with legal formalities. Having a more formal written agreement might provide additional peace of mind, but it's not required for the payments to be treated as non-taxable child support. The consistent Venmo descriptions plus any text/email exchanges should provide adequate documentation.
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Luca Esposito
14 I went through almost the exact same situation! Quick tip - save screenshots of all the Venmo transactions that show "child support" in the description. Also, if the biological father ever mentions the purpose of the payments in texts or emails, save those too. When I filed, I didn't have to submit any of this documentation, but I keep it all in a folder just in case I'm ever questioned about it.
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Luca Esposito
•9 This is great advice. Documentation is key! I'd also recommend keeping receipts for major expenses for the child that show you're using the funds for their benefit.
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